GOP unveils long-awaited budget proposal

STATE'S BUDGET CRISIS

Published 4:00 am, Thursday, May 12, 2011

Photo: Rich Pedroncelli, AP

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Assembly Speaker John Perez, D-Los Angeles, left, and Assemblywoman Connie Conway, R-Tulare, confer at the Capitol in Sacramento, Calif., Thursday, May 12, 2011. Conway, who leads the Republicans in the Assembly, released a budget proposal that closes California's $15. 4 billion deficit without tax extensions. less

Assembly Speaker John Perez, D-Los Angeles, left, and Assemblywoman Connie Conway, R-Tulare, confer at the Capitol in Sacramento, Calif., Thursday, May 12, 2011. Conway, who leads the Republicans in the ... more

Photo: Rich Pedroncelli, AP

GOP unveils long-awaited budget proposal

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(05-13) 04:00 PDT Sacramento --

Republicans in the Legislature, long accused by Democrats of not offering solutions to the state's budget crisis, unveiled a spending plan Thursday that they said would protect education and not raise or extend taxes.

The proposal from Assembly Republicans relies on an upswing in revenues, big cuts to state employees, social and health services, and privatizing some state jobs, but it was swiftly criticized by Democrats as gimmicky and unrealistic.

The GOP plan was released just days before Gov. Jerry Brown's May revision of his original budget plan and is the first formal proposal made by Republicans to solve California's remaining $15.4 billion deficit.

"For once we're going to live within our means, not kick the can down the road, and solve some problems. We believe that is achievable without additional taxes," said Assembly Republican Leader Connie Conway of Tulare, who sent the plan to Assembly Speaker John Pérez, D-Los Angeles.

A spokeswoman for the speaker said Pérez is pleased that Republicans have "finally put forward a budget proposal in public," but the reaction from the administration was strongly negative.

Plan or press release?

"This is not a budget proposal, this is a budget press release," said Gil Duran, spokesman for Brown. He said the proposal is "the usual smoke-and-mirrors, head-in-the-sand approach, with a short-term fix that will do nothing to get us out of the mess we're in."

The Republican plan could become a political challenge for Brown and the Democrats, who still argue that tax increases and extensions are necessary even as revenues collected by the state increase, and as Republicans say the deficit can be solved without cutting education or public safety.

Assemblyman Jim Nielsen, R-Gerber (Tehama County), said, "The average citizen is driven by rational thought and in their minds if there is substantial additional revenue ... I believe that strongly undermines the argument for extending taxes on them for five years."

Brown has not been in budget negotiations with Conway, who had said she wanted nothing to do with the governor's original plan. Duran said tax increases and extensions subject to a vote of the people would remain part of Brown's budget plan in the revision to be released Monday.

Republicans, who have refused to support new or extended taxes, are under increasing pressure to negotiate with the governor, as the Service Employees International Union today begins what it says will be a seven-figure ad campaign focused on specific Republican lawmakers to push them to strike a deal.

A coalition of business groups on Wednesday sent a letter to the governor and lawmakers from both parties pleading with them to close the deficit by June 15, the constitutionally required deadline that most often is missed.

Looking ahead

The Republicans said they did not know what next year's deficit would look like if their plan was adopted, though Brown has claimed his proposal would ensure no deficit for at least three years. The GOP plan also includes billions of dollars in one-time solutions and a reserve that could be as small as $100 million.

Some of those one-time solutions include taking $2.4 billion in money from voter-approved funds for early childhood development and mental health, which is $500 million more than proposed by Brown. Republicans said they would want voters to weigh in on that.

The budget plan would suspend for one year some payments worth $450 million to low-performing schools, make an unspecified $1.1 billion reduction in state employee costs and another $600 million unspecified cut in operating expenses, impose a two-day-per-month furlough for courts for $130 million and put the University of California in charge of health care for state prisoners to save $400 million.

Additionally, Republicans propose implementing electronic court reporting, contracting out food service and janitorial jobs in state hospitals and developmental centers along with centralizing the system for determining who is eligible for certain state programs, all for a savings of $700 million.

The plan also relies on $2.5 billion in unexpected tax revenue that has come into the state's coffers and assumes there will be an additional $2.5 billion next year.

State Treasurer Bill Lockyer, a Democrat, blasted the plan and said that it wouldn't be taken seriously by the bond market and would prevent the state from selling bonds, resulting in the shutdown of infrastructure projects across California.

"The folks who offer this plan pretend our longer-term budget gaps don't exist. Or maybe they think Tinkerbell will fly in and make the shortfalls vanish with pixie dust," Lockyer said in a statement.

He added that additional revenues are likely to disappear in future years, and that the state also has more than $30 billion in internal borrowing from past budget deals to pay back, along with unfunded liabilities.

Targeting children, seniors

Advocates for health and social services in the state said the Republican plan targets poor children and seniors.

"While Gov. Brown attempted to close the budget with an equal mix of modest revenues and steep cuts, Republicans are once again proposing a budget plan based on an inflammatory and out-of-control ideology, not common sense," said Nancy Berlin, executive director of California Partnership, which advocates for programs for the poor.

Members of the California Teachers Association protested state education cuts and refused to leave the offices of Conway and Senate Minority Leader Bob Dutton, R-Rancho Cucamonga (San Bernardino County). About two dozen were arrested. More protests by teachers are expected today at the Capitol and around the state.

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